T+2 ISC sets date for US move

The US T+2 Industry Steering Committee (T+2 ISC) has announced the industry target date of September 5, 2017, for the US to move from a T+3 to a T+2 settlement cycle.

Shortening the US settlement cycle for equities, corporate and municipal bonds, and unit investment trust (UIT) trades from the current three-day settlement cycle, or T+3, to T+2 will reduce operational, systemic and counterparty risk, lower liquidity needs and limit procyclicality, while aligning the US with other T+2 settlement markets across the globe, it notes. A shorter settlement cycle will enhance US market structure, improving safety and efficiency for investors.

The target implementation date is contingent upon obtaining regulators’ support in amending applicable rules in a timely manner, and upon the successful completion of industry-wide testing during Q2 and Q3 of 2017.